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A bill which sets out the Government's plans to convert EU law into domestic legislation is "vital" for ensuring the country leaves the bloc in an "orderly manner", Brexit Secretary David Davis has said.

Mr Davis told a packed Commons chamber that the EU (Withdrawal) Bill was an "essential step" in the Brexit process.

Prime Minister Theresa May and Labour leader Jeremy Corbyn were among MPs who gathered in the Commons for the start a two-day debate on the bill - which marks the first time MPs have had the chance to discuss its main principles.

Any votes will take place on September 11.

Mr Davis said: "This bill is an essential step, whilst it does not take us out of the European Union - that's a matter for the Article 50 process - it does ensure that on the day we leave businesses know where they stand, workers' rights are upheld and consumers remain protected.

"This bill is vital to ensuring that as we leave, we do so in an orderly manner."

Labour blast 'unprecedented power grab'

Labour has stated its intention to vote against the bill as it stands, calling it "completely unacceptable".

Shadow Brexit Secretary Sir Keir Starmer said the bill would "reduce MPs to spectators" as it would give ministers the authority to amend the law without securing parliamentary consent under so-called Henry VIII powers.

"It's an unprecedented power grab, rule by decree is not a miss description," said Mr Starmer.

"The name of this bill was changed from the Great Repeal Bill to the EU (Withdrawal) Bill. The word 'great' should have been preserved, but it should have been changed to the 'Great Power Grab Bill'."

The Liberal Democrats and Scottish and Welsh nationalists are also lined up to oppose the bill.

But the chances of a Government defeat look slim, with pro-EU Tory Anna Soubry playing down the prospect of a rebellion - and some Brexit-backing Labour MPs thought likely to defy Mr Corbyn's whip.

'Very good prospect' of bespoke transitional arrangements

Earlier, Mr Davis told MPs there is a "very good prospect" of Britain negotiating bespoke transitional arrangements with the EU.

He added that he hoped any transition would be as close as possible to the UK's existing trade relationship with the EU, but said this did not mean Britain staying in the single market or customs union in the longer term.

The government is under pressure to negotiate transitional arrangements before March 2019, when Britain formally leaves the EU.

When pressed by Mr Starmer on the issue at Brexit Questions, Mr Davis said: "I believe that the benefits of a transitional arrangement are both ways, they're symmetrical, they apply equally to France or Holland or Germany or Denmark, as they do to us.

"We're finding that the Commission is open to discussion of transition.

"We've only raised it briefly at each of the last two meetings, because it doesn't fit within the current four groups of negotiation.

The Labour frontbencher also asked Mr Davis what form those arrangements would take.

Mr Davis replied: "In terms of our position, it's very clear. The transition arrangements will meet the requirements, three different requirements.

"One is to provide time for the British Government, if need be, to create new regulatory agencies and so on.

"The time for companies to make their arrangements to deal with new regulation, and time for foreign countries, for other countries, to make arrangements, for example on new customs proposals.

"Now that's what will be required, that's why we need to be as close as we are to our current arrangement - that does not mean that in the long run we are in either the customs union or single market."

Dominic Grieve has called the bill a 'monstrosity'. Credit: PA

Former Tory attorney general Dominic Grieve has branded the bill "an astonishing monstrosity" and warned he will vote against it unless it is substantially improved.

Dominic Grieve told ministers that while he would support the proposals at second reading, he would not do so at the bill's third reading as it stands.

Mr Grieve said the bill was unclear in a number of areas in terms of the transfer of EU law, adding that the current situation with the so-called Henry VIII clauses was "frankly ridiculous".

However, the MP for Lambeth conceded that a repeal bill is "vital" and the UK "cannot leave the European Union sensibly without such a bill being on the statute book".

His comments follow those of the Conservative former chancellor Ken Clarke, who had earlier told MPs he may rebel against the European Union (Withdrawal) Bill unless he received "some assurances".

Barnier 'worried' over Ireland border issue

Michel Barnier (right) and David Davis have held three rounds of Brexit talks. Credit: AP

Meanwhile, chief EU negotiator Michel Barnier has released a raft of new papers setting out the EU's negotiating position on sensitive issues including the future of the Irish border, customs arrangements, intellectual property rights, public procurement and data protection.

Mr Barnier said he was concerned over the UK Government's position on Ireland, which appeared to envisage the EU suspending the application of its laws, single market and customs union at a new external border.

Speaking at a press conference in Brussels, Mr Barnier said: "What I see in the UK paper on Ireland and Northern Ireland worries me.

"The UK wants to use Ireland as a kind of test case for the future EU/UK customs relations. This will not happen.

"It is the responsibility of the United Kingdom to ensure that its approach to the challenges of the Irish border... takes into account and protects the very specific and interwoven political, economic, security, societal and agricultural context and frameworks on the island of Ireland.